KAMPALA, Uganda — Seven land-based casinos in Uganda have threatened to shut down over a new 15 per cent withholding tax on gambling winnings, putting approximately 2,100 jobs at risk.
The operators say the tax collection system required by the Uganda Revenue Authority (URA) is difficult to implement in traditional casinos, where players move between different games and frequently exchange chips, making it challenging to calculate their actual winnings and losses.
The dispute escalated on Friday, October 30, after URA published a notice directing gaming and betting operators to enforce the tax, which took effect on July 1, 2026.
Under the directive, casinos are required to deduct 15 per cent from players’ net winnings when they redeem their chips. The taxable amount is calculated by subtracting the value of chips purchased during a visit from the value redeemed.
However, casino operators argue that the system could result in players being taxed on money they have not actually won, particularly when they move between games such as roulette, blackjack, baccarat and slot machines.
A representative of the seven casinos told the Kampala Dispatch that the proposed enforcement mechanism threatens the industry’s viability and could force operators to close.
“The seven casinos employ approximately 2,100 Ugandans whose livelihoods, along with those of their dependants, would be threatened by closure,” the representative said.
The operators added that they already pay a 30 per cent gaming tax on gross gaming revenue, alongside corporation tax, Pay As You Earn (PAYE), licensing fees and other statutory obligations.
“We would rather shut down than implement a tax collection system we cannot accurately administer,” the representative said.
Casino operators challenge tax collection method
The Uganda Gaming Operators Association, chaired by Bob Kabonero, has appealed to President Yoweri Museveni to maintain an exemption for winnings from genuine land-based casinos.
In a letter dated July 22, the association argued that the proposed collection method does not adequately account for how physical casinos operate.
Its concern is that a player may purchase chips, move between several gaming tables and eventually redeem fewer chips than they initially bought, despite having received payouts during individual games.
For example, a customer who enters a casino with Shs10 million and leaves with Shs8 million has suffered an overall loss of Shs2 million.
The association argues that taxing the redeemed amount without accurately accounting for the player’s overall position could result in taxation of the player’s original capital or repeated taxation of funds.
It maintains that online gaming platforms can record individual transactions electronically, while traditional casinos face greater difficulties tracking a player’s cumulative activity across different games.
“Online roulette and physical roulette carry the same name but do not create the same audit trail,” the association argued in its letter.
The operators say implementing the system would require compulsory player registration, electronic tracking of chips, individual gaming accounts and substantial investment in compliance infrastructure.
They have proposed stronger monitoring, separate licensing arrangements, independent audits and penalties for operators disguising online gaming as land-based activity.
Mayfair Casino closure raises concerns over jobs
The dispute has already had consequences for Uganda’s casino industry.
According to Vivid Voice News, Mayfair Casino has closed its physical operations, affecting approximately 300 employees.
The remaining operators fear that enforcing the tax without addressing the challenges associated with physical gaming could trigger further closures.
Casino employees are reportedly preparing demonstrations next week to draw attention to the potential impact on their livelihoods.
One employee told the Kampala Dispatch that workers were worried about losing their only source of income and wanted the government to reconsider the implementation arrangements.
The association says the industry has operated in Uganda for more than three decades and warns that a shutdown would affect not only casino employees but also their dependants and businesses linked to the sector.
How Uganda arrived at the 15 per cent casino tax
The dispute follows a series of legislative changes involving the Income Tax (Amendment) Bill, 2026.
During the initial consideration of the legislation, Parliament proposed exempting winnings from licensed land-based casinos from the 15 per cent withholding tax, while retaining the tax on other betting and gaming activities.
However, President Museveni declined to assent to the Bill in July, arguing that exempting physical casinos would create opportunities for tax avoidance and unfair competition between land-based and online gaming operators.
He recommended that winnings from both categories of gaming activities be subjected to the same tax treatment.
Parliament subsequently adopted the President’s recommendations in August, removing the exemption for land-based casinos while retaining the exemption for winnings paid through the National Lottery.
The government projected that extending the tax to land-based casino winnings would protect approximately Shs65 billion in revenue during the 2026/27 financial year.
Finance Minister Henry Musasizi had told Parliament’s Finance Committee that the exemption could result in revenue losses and create an uneven tax environment across the gaming industry.
URA defends withholding tax requirements
URA’s published guidance provides for a 15 per cent withholding tax on net winnings from gaming and betting activities.
The authority defines net winnings as the difference between the amount paid out and the amount staked.
For instance, a player who stakes Shs50,000 and receives Shs300,000 makes net winnings of Shs250,000. The 15 per cent withholding tax amounts to Shs37,500, leaving the player with Shs262,500.
URA also requires gaming operators to maintain transaction records, submit monthly withholding tax returns and comply with other reporting obligations.
The authority’s broader tax framework provides for a 30 per cent gaming tax on gaming revenue, calculated as stakes received less payouts to players.
The tax dispute therefore centres not only on the rate but also on how winnings should be accurately established and recorded in physical casino operations.
While the government maintains that uniform taxation is necessary to protect public revenue and prevent tax avoidance, operators insist that the collection mechanism must reflect the practical differences between traditional casinos and online gaming platforms.
The Uganda Gaming Operators Association says it has not received a response to its appeal to the President.
With employees preparing to demonstrate and operators warning of possible closures, the dispute now presents a challenge for the government as it seeks to enforce the new tax without disrupting an established industry.
